The SEC is not technology neutral

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Considering all the ways the Securities and Exchange Commission has now tried to crack down on the crypto industry, it’s no surprise that there are more and more dissidents reporting issues with the top financial cop. of the Americas.

What might be more surprising, however, is that one of the most vocal dissidents is actually one of the five SEC commissioners herself, Hester Peirce.

In a new interview with community outlet Web3 Coinage, Commissioner Peirce lays out her biggest laments working at an agency she says no longer regulates crypto on a neutral basis.

I get why you want to warn the American public that if someone comes up to you and offers you something crypto-related, it might be something that isn’t legit and you want to ask questions, that’s fine. I mean, we put out these kind of risk alerts on all kinds of things, she said. But this whole notion that there’s a whole separate set of standards that enforces a separate higher set of standards that applies in the crypto space than anything else which to me doesn’t seem very technology neutral .

SEC Commissioner Peirce, affectionately known as “Crypto Mom,” joins Coinage for a new interview about the SEC’s ongoing crackdown on crypto. Watch the full interview above with a Coinage NFT.

Commissioner Peirce has long feared that the SEC’s strategy of delaying regulatory clarification for crypto companies, or primarily controlling the industry through lawsuits and enforcement action, would backfire. The SEC’s latest decision to deny a wave of spot Bitcoin ETF applications from BlackRock and Fidelity is the most recent example to report. In total, the SEC has now refused to approve more than three dozen Bitcoin ETF applications.

I think one of the reasons I’ve been critical and others have been critical is that without a regulatory framework that makes sense, you end up with a world in which it’s really hard to tell good actors from bad actors, she says.

Members of the crypto industry share Commissioner Peirces’ fears that hopes for a regulatory path to operate in the United States are fading. Solana founder Anatoly Yakovenko previously lamented the likelihood that Americas’ hardened stance on crypto could spill over to other jurisdictions. Exchange giants Coinbase and Gemini are already looking to bolster their overseas operations. In another Coinage interview, Algorands CTO said it was inevitable that more crypto jobs would move overseas.

Much of the anger of those unhappy with the SEC’s attempts to police crypto so far is mostly sparked by a record of apparent hypocrisy. In his last appearance before Congress, SEC Chairman Gary Gensler claimed that crypto was to blame for the spate of bank failures earlier this year. In one specific example, he said crypto was directly behind Signature Bank’s failure, a point refuted in Congress less than 24 hours later by New York Department of Financial Services Superintendent Adrienne Harris. .

Caught in the act: SEC Chairman Gary Gensler blamed crypto for Signature Bank’s failure during congressional testimony.

Today, New York Department of Financial Services Superintendent Adrienne Harris refuted this before the same committee:

“It’s not the case that failure pic.twitter.com/1dwhRx5ZlD

— Coinage (@coinage_media) April 19, 2023

Chairman Gensler has also repeatedly tried to make it seem like crypto firms are willfully ignoring his pleas to come in and register with the SEC to become compliant. But even Commissioner Peirce noted that without clear legal frameworks in place, this is not a realistic option on the table for many.

I mean, I haven’t seen much evidence that it works very well, she joked.

In the meantime, Congress has now stepped in with its own bill to put in place a potential alternative path that would not bring all cryptocurrencies into the scope of the SEC. Commissioner Peirce celebrated this initiative.

I think too often regulators see the world through the lens of you can’t do anything and you can’t do anything unless I tell you you can do something, she said. Now, again, there are laws on the books and we abide by those laws, but I still think enforcing them within that freedom framework is super important in the United States and I’m afraid in conversations around the crypto, we have lost some of that sense of the importance of this principle.

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